the oliver wight class a checklist for business excellence (the oliver wight companies)

Managing the Strategic Planning Process Managing and Leading People Driving Business Improvement
Integrated Business Management Managing Products and Services
Managing Demand Managing the Supply Chain Managing Internal Supply
Managing External Sourcing
Published simultaneously in Canada.
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Library of Congress Cataloging-in-Publication Data:
The Oliver Wight Class A checklist for business excellence / Oliver Wight International, inc..—6th ed.
p. cm.—(Oliver Wight manufacturing series) Rev. ed. of: Oliver Wight ABCD checklist for operational excellence. 5th ed. 2000. Published simultaneously in Canada. Includes bibliographical references. ISBN-13 978-0-471-74106-0 (pbk.) ISBN-10 0-471-74106-X (pbk.) 1. Industrial productivity—Measurement. 2. Strategic planning. 3. Total quality
management. 4. Manufacturing resource planning. 5. Production control. I. Wight, Oliver W. II. Oliver Wight International, inc. III. Oliver Wight ABCD checklist for operational excellence. IV. Series.
HD56.25.O38 2005 658.4013—dc22
2005003952
10 9 8 7 6 5 4 3 2 1
1. MANAGING THE STRATEGIC PLANNING PROCESS 1
2. MANAGING AND LEADING PEOPLE 21
3. DRIVING BUSINESS IMPROVEMENT 47
4. INTEGRATED BUSINESS MANAGEMENT (SALES & OPERATIONS PLANNING) 75
5. MANAGING PRODUCTS AND SERVICES 101
6. MANAGING DEMAND 123
8. MANAGING INTERNAL SUPPLY 169
9. MANAGING EXTERNAL SOURCING 193
OLIVER WIGHT BIOGRAPHY 213
Additional clarification can be obtained from the Oliver Wight International website (www.oliverwight.com) where a glossary can be found and the metrics to support Performance Measures.
v
PREFACE
Welcome to the sixth edition of the Oliver Wight Class A Checklist for Business Excellence, which marks another major milestone on a journey started by Oliver Wight himself in the 1970s. His passion was to support companies seeking to be consistent winners by aspiring to excellence. This new Checklist is the comprehensive statement of excellence in business today.
It looks very different from our last version, with its scope widened to embrace every part of the business to be pursued for total excellence. Additionally, it now requires a demonstrated superior business performance for the coveted Class A award. However the major features remain and are unique.
• It is direct and practical. It does not follow the trend of setting theoretical business models for you to “fill in.” It sets out those business processes and practices that we see over and over at the heart of successful and excellent businesses.
• Its chapters align with core business processes and the enablers of those processes, covering the entire Business.
• It is aimed so that your people can see for themselves what “excellence” is and what each of them has to do for the company to be excellent.
• Its scoring method allows you to visualize and measure progress towards excellence in every part of the Business.
The sixth edition offers the longest standing Excellence Award of international repute. It recognizes the efforts of your people and can be used with clients and customers to prove your efforts on their behalf.
The first checklist in 1977 was a simple list of 20 questions that a man- ager could answer to evaluate his business. It was the very first such list in the world and, consequently, the checklist concept became widely ac-
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cepted. However, standards of excellence in business had started their own revolution. As a result, the list went from one page to a book, with each version building on the last. The questions were built from the accumulated experience of Oliver Wight’s organization throughout the world and from the many people they worked with in thousands of companies.
The first checklist book was published in 1988 and was a major statement in defining excellent use of Manufacturing Resource Planning (MRPII) systems, continuous improvement processes and the realiza- tion of sustainable processes. The fourth edition followed in 1993 and the fifth some seven years later in 2000. With each edition, the standard for excellence increased, and the scope of the business that was assessed widened as the world became evermore competitive and companies became larger and more international.
Throughout this adventure some things are unchanged:
• The Oliver Wight International organization continues to grow and set the standards in global business excellence.
• It operates throughout the world offering the same message in many languages for its multinational and multicultural client base.
• It holds to the same core belief that education and training at all levels of the company are the keys to achieving excellence.
• One other thing that remains unchanged is the role and purpose of this checklist.
Many have contributed to the know-how in this book, but we must recognize some people who have been major contributors.
• The book has been sponsored by the Oliver Wight International Board, and its development was led by Andrew Purton as its champion.
• The checklist architect, Lawrie Rumens, has brought his experience and expertise to the design forum to steer the journey to a superior Class A.
• The project leader, Lloyd Snowden, has spent so much time and energy driving very busy people and has delivered the book on time.
• Glyn Williams and Jon Minerich provided the global leadership. • Each chapter had its own champion and sponsor supported by ex-
pert teams from the other regions. The chapters were led by Lawrie Rumens, Peter Hill, Andrew Purton, Les Brookes, Kevin Herbert, Liam Harrington, Ron Ireland, Rod Hozack, and Barry Linger.
Preface vii
Chris Radford, Paul Archer, and Shirley Harrison also generously contributed.
• Last, where would we be without Jill Losik pulling it and us together in such an uncomplaining way?
So here is the sixth edition Checklist. It is no longer an MRP checklist or a manufacturing excellence standard. It is a standard of excellence for all businesses. We know that you will find it demanding, but then true excellence never did come easy. It will be rewarding as well. True excellence is the only way of consistently and reliably competing and winning in business. That’s what Oliver Wight Class A is about, helping you to be in a position to win consistently in your business.
For those executives anxious to take up the challenge of raising their company’s performances to heights of excellence, this Checklist will show them the way.
Walt Goddard Chairman Emeritus, Oliver Wight International, Inc.
viii Preface
INTRODUCTION
Those of you familiar with the Oliver Wight checklist over a period of time will view this updated version with anticipation and perhaps a little nervousness. We have all experienced the moments before we open an examination paper when we are convinced that we will not be able to answer a single question adequately. Yet once we are into it, we find that of course it all makes sense. It is not so daunting when we make a start.
This sixth edition of the renowned Oliver Wight Class A Checklist for Business Excellence has a familiar style and approach to assessing excellence. Yet in content and structure you will find it very different and much more demanding—but then the journey to excellence is always demanding. Since we published the fifth edition in the year 2000, the pace of change and speed of advancement in business has raced on. What seemed advanced then is ordinary today; what was extra then is a part of the standard deal now; and customers expect and demand more and more. Companies clinging to that older view of excellence will be found wanting in the race to win in business.
WHAT IS DIFFERENT IN THIS SIXTH EDITION?
First, there is a new section at the front of the book called “Founda- tion.” We had to decide at the outset what few basic principles of excellence were important enough to be at the heart of the checklist. We have described these here in brief so that you can be familiar with the think- ing before plunging into the detailed assessment. Clearly, we have only provided an overview of these principles in this section. However, you can find out more through Oliver Wight’s global education.
Second, the checklist range has been extended from a traditional
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operational focus to encompass all business processes and all business sectors. This will be no surprise, since across the world service sectors are growing and are influencing the traditional industries. Business dif- ferentiators are moving to managing products and services, managing the supply chain, managing the procurement of externally sourced items, and developing better relationships with customers and consumers. All of these issues are now extensively covered alongside the more traditional foundation elements you would expect to find in this checklist.
THE CHAPTERS
The chapters are split into two groups. There are four priority chapters where we have brought together the processes and practices that are common through all business processes and which enable the whole business to be excellent. They are:
• Managing the Strategic Planning Process: You have to be clear about business vision and strategy for your people to plan what has to be done to get there. This chapter will challenge your process for the longer term planning of the business. It will demand the setting of business priorities and clear communication when deploying your plans and your business excellence program throughout the business.
• Managing and Leading People: People are the ultimate differentiator as businesses get more demanding and competitive. This chapter will demand that you think through your business values and its organization for the tasks ahead, that you are clear about the company culture and behaviors that you need, and that you have active development programs designed to improve the competencies of your people for the new challenges ahead. It will challenge your processes for Knowledge Man- agement and your culture of leadership and teamwork.
• Driving Business Improvement: This articulates how you can assess the maturity of your business and its processes. It then challenges how you prioritize your Business Improvement Program to the early gains areas that also create a solid foundation for the future. This chapter will challenge you to walk before you try to run and to give value to those everyday issues that are at the heart of excellence in business.
• Integrated Business Management: This is the natural evolution of the Sales and Operations Planning process. It has been designed and developed by Oliver Wight over many years, building on client demands
x Introduction
and experiences in all sectors and in all parts of the world. This process is the unique, yet now standard, approach to managing the gap between company strategic goals and everyday activity; it is the prime tool for keeping all parts of the company to a common agenda and set of priorities; and it manages the entire business through one set of numbers and ensures timely decisions to maintain management control.
These chapters support five following chapters of equal size and importance that address the prime processes in most companies:
• Managing Products and Services: In every business sector, product life cycles are reducing. Our portfolios require an increase in new products and services and a carefully planned phase-out of old. This chapter asks how well you set your product portfolio and manage products and services. It expects you to have a clear technology strategy to support this. It challenges your practices for delivering sales and profit to your business through an increased number of successful products and services into your market. It includes the latest practices in the Program Management of large complex projects.
• Managing Demand: Greater understanding of customer needs and of what is happening in your market place leads directly to increased predictability in the short-, medium-, and long-term needs of your business. It enables better planning of your position in the market place and order-winning plans that are more successful. This chapter challenges how well you create and plan demand and how professionally you control supply and demand in the very short term through sales activity.
• Managing the Supply Chain: As the latest technology extends our target market, the increasing challenge to business is how to deliver the product and service to the point of use. This chapter challenges how well you understand your extended supply chain and how it is optimized strategically and day by day for best customer service and for business performance.
• Managing Internal Supply: While business focus is moving to the extended supply chain, excellence in the core supply activities remains vital to live up to the promises and wishes of customers and consumers and to meet the challenge of global cost competition. This chapter challenges whether your operations that make and deliver goods and services understand what is excellent today and how quickly they must respond to changes and the demand of the market place.
• Managing External Sourcing: The increase in products and services and the wider market present new challenges to our Make/Buy decision
Introduction xi
process at product, component, and material levels. They also impact the sourcing strategies that follow those decisions. Technology offers new procurement approaches that have major potential for saving, and this has significantly advanced the use of Total Cost of Ownership in critical decision making. This chapter sets new standards for assessing excellence in your procurement processes and in the planning and coor- dination of movement of goods into your supply chain.
ADDITIONAL INFORMATION
You may seek information from previous checklists that is no longer expressed in this edition. To maintain a practical size Checklist with a broader base something had to give! However, this is not totally lost to you. Clients of Oliver Wight have free access through their Oliver Wight Associate to supplements to these chapters. This is where we have captured the more detailed challenges from the fifth edition should your program require them.
MEASURES
Prime performance measures are included at the end of each chapter of this Checklist, but we have not published the detailed appendices of recommended measures. In a fast-moving world, we wanted to be able to update and add freely to these. So you will find them openly available on our website at www.oliverwight.com, along with a new glossary that is designed to take away the confusion of any new terminology. You will find this approach more relevant to your business needs.
RECOGNITION OF EXCELLENCE
Last, you will see a new scoring system, using a more natural 5-point scale, and a new way of recognizing your steps toward excellence. We are mindful that against a broader and higher standard it will take you longer from the same starting point to achieve Class A Business Excel- lence in practices and performance than the previous checklist. As you
xii Introduction
start this journey to excellence, we will invite you to set a total excellence program with prioritized projects and initiatives, each giving you business gains in a relatively short timescale while taking you a step further toward your longer goals. Our recognition of your success will come in three forms:
• Class A Business Excellence: The full Class A award when an entire business meets the requirements of all chapters of this checklist.
• Business Unit Class A Accreditation: To recognize the achievements of a stand-alone business within a larger multiunit business that meets all the requirements of its appropriate chapters.
• Class A Recognition Award: To recognize predetermined projects and milestones in your business improvement program that have delivered their planned business gains on the journey to Class A Business Excellences.
The demands on a successful business are racing ahead, and without an aggressive excellence program, you will fall behind your competition. Your Business Improvement Program must be structured and tar- geted to deliver rewards for your customers and your owners. It is your route to winning consistently in business.
Introduction xiii
FOUNDATION
As each day passes, companies in every sector of business get faster, smarter, and more innovative. In producing this latest version of our famed Checklist of Business Excellence, we have set a new Class A standard of excellence and established the basic principles that are important for a company to achieve outstanding performance today. This chapter of our checklist sets out those foundations and documents the main assumptions we have made about practices and processes in excellent companies.
ACHIEVING EXCELLENCE
Our first assumption is that we are all in business to win: excellent companies win consistently and win more than their fair share. They set the standards in their chosen markets and serve their customers better than the competition. They outperform the competition sufficiently to differentiate. There is no point in any excellence program if it does not seriously deliver what the customer wants.
Our second assumption is that they will also outperform in delivering what their owners, the shareholders, want in cash flow, return on assets, and growth.
Last, all the other company stakeholders also have to be satisfied, espe- cially the community and its environment and, of course, the employees who are increasingly the biggest differentiator that any company can have.
EXCELLENT PERFORMANCE
You will need a process to define excellence for your company. This definition will drive the targets and goals of the company. The process tells your company enough about itself and its market to put numbers on the targets and goals. We expect this to be “upper-quartile” performance
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in your sector. We do not see this as a complex concept nor as a demand on you that leads to eternal statistical debate. Put simply, you know what being “ahead of the game” means for you, and you can demonstrate that your balanced performance to all your stakeholders puts you in the upper quartile of companies in your sector or market place. You know how you will maintain that winning position. You will be challenged on this in the chapter “Managing the Strategic Planning Process.”
The chapters capture the vast knowledge and experience of Oliver Wight associates around the world and our thousands of clients in setting out the practices and processes that we see as excellence today. This is a minimum standard for an excellent company. You may be fortunate that your business sits in a sector that is relatively undemanding, but be as- sured that the demands of excellence will come and will come faster than you may expect. Alternatively, you may find that you are in a very demanding sector and that you need to be in advance of these standards to win. This may be so, but understand that the foundations of excellence are the same for every company in every sector and they are the entry qualifi-
cation to any higher performance. We are setting our minimum standard as the practical foundation for wherever this exciting world takes us next.
THE JOURNEY TO EXCELLENCE
The journey to excellence is tough and uncompromising. It is never ending and is applied to every part and every process in the company. For such a journey to be sustained, it must continually deliver results and gains for all its stakeholders. The journey is a series of bite-sized projects with short timescales. These build into a longer business improvement program that assures success now and in the future. Improvement activity must be prioritized to the current needs of stakeholders while delivering the firm foundations for future advanced work. As in building a house, we risk everything if we are not sure that the right foundations are firmly in place before we start the walls, and that they are right before starting the roof and on to the finishing processes.
The Oliver Wight Business Maturity Map (see Figure 1) enables you to understand the maturity of your business and the projects within your business improvement program that will deliver the best real gain now. This is addressed in the Oliver Wight education, which is arranged both publicly and privately in all parts of the world.
First you must address the root causes of firefighting or event-driven management in your business. Unplanned events may be driven from the
Foundation xv
market place because your customers require more than your standard processes can deliver; or they may arise from your own in-house indisci- pline in the way you work and your behaviors as a total team. Left un- resolved, firefighting drains management time and energy in solving the same issues over and over. It prevents gains from problem-solving and team-based initiatives being sustained. Tackling the root causes of being event-driven constitutes Phase 1 of your journey toward excellence.
With the foundation of a well-planned and coordinated business in place, you can expect sustainable gains from problem-solving initiatives. You may choose to accelerate your processes, make them more agile, or absolutely eliminate the root causes of failure in them. By doing so, you will be capturing the knowledge and experience of your people at all levels of the company into its processes and procedures so that it is not lost when people move on. Projects that eliminate the root causes of failures and capture knowledge in your company processes form Phase 2 of your journey toward excellence. This checklist is benchmarked and expects that processes and behaviors of a Class A company will be in the top half of this Phase 2 maturity.
In Phase 3 a step change in productivity and effectiveness is sought by im- planting this accumulated knowledge of the business into its systems and machines. Increasingly those systems become more intelligent and demand less and less human intervention in decision making. People play a more vital role at this time, focusing on the integrity and management of sophisticated processes rather than traditionally managing products and orders through processes. This phase is not about the number of computer termi- nals or computer controlled machines in your operations. It is about your confidence that those systems will make the right decisions in all circum-
xvi Foundation
Figure 1. The Oliver Wight Business Maturity Map
stances. Phase 3 is not yet included in this checklist. However, the standards we have included ensure that you will be well prepared for this activity.
Last, Phase 4 is getting the architecture of the knowledge-based systems in each process across the entire company so that they communicate with each other as one and give a seamless decision-making stream to the customer. This frees your people in small teams to develop and grow business sectors and so develop the entire business.
IMPROVING THE EARLY PHASES
Most of us will be in businesses predominantly in the first two phases. How much of your working time is spent dealing with unplanned events, and what can you do about it? The Oliver Wight Jigsaw Puzzle (see Figure 2) helps us to understand this more. The analogy here is simple. When we do a jigsaw puzzle at home, we always look for the corner pieces first because they are easy to find, quick to put in place, and they give foundation and structure to everything else. Of course we leave the blue sky work to the end when it has more relevance.
So if you want to eliminate unplanned events from your business, then the four most rewarding actions are likely to come from addressing the jigsaw puzzle corner pieces.
1. Ensuring that people undertake their work consistently, using the approved processes that are always up to date. Without this culture, im- proved processes will be followed no better than the old. You will be challenged on this issue in the “Managing and Leading People” chapter.
2. Ensuring that your people own, and are responsible for, the work that they do and the improvement of the processes they use. They will also own their workplace, its maintenance, and any tools, machines, or systems that they use every day. You will be challenged on this in the “Driving Business Improvement” chapter.
3. Having one clear set of priorities and one set of numbers that are acknowledged and used throughout the business. There must be one clear agenda from the top to the bottom of the company and across all its processes and functions. The Oliver Wight Integrated Business Man- agement process tackles this issue, and you will be challenged on this in the “Integrated Business Management” chapter.
4. Having robust planning processes that support the company agenda process, which are realistic and which are followed and regularly fulfilled throughout the business. You will be challenged on this in the process chapters (5 to 9) of this checklist.
Foundation xvii
Getting these cornerstones firmly in place will assure you that Phase 1 of the maturity map is sound enough to build Phase 2 activities. Phase 2 activities accelerate the processes in the company and make them failure free. They are typified by the jigsaw edge pieces and are detailed in the challenges posed in the “Driving Performance Improvement” chapter.
INTEGRATED BUSINESS MANAGEMENT
The Oliver Wight Integrated Business Model is shown in its simple form in Figure 3. It is driven by Integrated Business Management. This is the renowned standard for managing the business over a rolling horizon. It keeps the entire organization on a single, agreed agenda for success. The process formally reviews the plans across the entire business on a monthly basis, seeking gaps between latest predictions and accepted goals. It has evolved from the familiar Sales and Operations Planning process to provide a comprehensive process for decision making to regularly close the gap between predicted business performance and the strategic goals in the business and strategic plan.
This process has monthly reviews of the vital processes in your business that control local plans and present an updated business plan regularly to the leadership team for agreement and approval. You will be challenged in depth about this business process in the “Integrated Busi- ness Management” chapter. In brief, the process seeks to:
xviii Foundation
Figure 2. The Oliver Wight Jigsaw Puzzle
1. Manage Products and Services to determine the introduction and phase out of products and associated activities to meet the Busi- ness plan
2. Manage Demand and Sales activity to win business and meet the Business plan
3. Manage the Supply Chain including internal and external sources of supply to ensure that demand plans are operationally achievable and will be met to achieve the overall business targets
4. Understand information and reconcile the issues, both operational and financial, from these processes to achieve an updated plan for the business that is agreed and approved by the leadership team
However, for this process to bring order and control into the business, its supporting processes must be capable of meeting the day-to-day demands placed on them now and in the future. Each element of the integrated business management process must have continuously running and robust processes to drive the business and make everyday decisions. The processes are defined in detail in the remaining chapters of the checklist:
• Chapter 5: Managing Products and Services • Chapter 6: Managing Demand • Chapter 7: Managing the Supply Chain • Chapter 8: Managing Internal Supply • Chapter 9: Managing External Sourcing
SUMMARY
Our Checklist is founded on clear and well-established principles:
1. It is performance based and requires you to have a process that identifies the challenge for you to win in your sector and to quantify what upper-quartile performance means for you.
2. The journey to excellence for any business requires a solid foundation of ownership, consistent working, and planning upon which to build high gain improvement activity.
3. The Oliver Wight process of Integrated Business Management, which has evolved from Sales and Operational Planning, is the standard for keeping a business on a single agenda of priorities, actions, and performance is measured by a single set of figures.
4. Robust planning and execution processes are needed to manage the business.
Foundation xix
THE IMPORTANCE OF PEOPLE
Last, we must return to the subject of your people. You seek to be more effective and productive by moving knowledge from your people into the systems of the company. As productivity increases, you have the opportunity to grow the company significantly. As processes become more sophisticated and higher performing, your people become much more important to the company and its performance. You will be challenged to manage processes rather than functional silos; those processes will need people to work together in self-managed teams where disci- plines and functions are mixed together to run the business, and your people will be faced with ever more complex tools and systems through which the business is run. We set out the challenge on people in the “Managing and Leading People” chapter. It asks how they are valued, how they are led, how they are developed, how they find out what is go- ing on in the business and, most important of all, how their successes are recognized across the company. People are your biggest business differentiator now and will be more so as your excellence program matures. Treasure, develop, and educate them. They are the future.
xx Foundation
HOW TO USE THE CHECKLIST
THE CLASS A CHECKLIST PURPOSE
While there are significant changes and advances in this Class A Checklist over previous editions, its purpose for you in your company remains refreshingly the same.
• It is by far the longest running excellence checklist available to you that is regularly updated with latest practices and process knowledge. It is not a theoretical model but is the accumulated knowledge and experience of Oliver Wight associates across the world and their clients in thousands of companies.
• It is a real benchmark of excellence today, which must be used to raise awareness of what is possible in every part of your company and to challenge the status quo.
• It establishes the gap in every part of the business between your status today and where you would like to be and enables you to establish a prioritized agenda for your journey to a defined Class A standard of excellence.
• It provides a mechanism to cascade ownership for change and for achieving excellence to those actually engaged on performing work every day, encouraging them to be a part of the assessment and shar- ing ownership of the results.
• It is a vehicle to coordinate multiple actions across all business processes in a consistent approach to excellence in the entire business, minimizing suboptimization.
• It provides an agenda with clear recognition of achievements and provides public and global recognition.
There is no better way of engaging your entire workforce in an ongoing total excellence program that delivers real and sustained business gains.
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EXCELLENCE PERFORMANCE
The new Checklist is designed and written to apply to businesses in every sector and is structured with a chapter for each major process that you will find in most businesses. In setting the agenda to win consistently against the competition, this Checklist challenges that excellent processes in themselves are not enough. They must deliver an excellent performance that differentiates. The Checklist calls for a company to have an ongoing process of discovery of what is possible, what the customers and consumers really want, and what the competition are doing. All of this will enable a benchmark of upper-quartile performance. Put simply to win consistently you must be demonstrably better than the competition in those things that are important to the customer.
CHECKLIST STRUCTURE
Within each Chapter there are typically 10 main subjects, most of which have two Definitions of excellence. It is the scoring of each Defi-
nition that determines your overall score for the chapter and whether you have reached Class A Business Excellence standards in this business process.
To help you determine this score, each Definition is further divided into (typically) five Topics, each with its own detailed Description. There is an opportunity to score each of these descriptions to help you to the right score for the Definition and to see in greater depth your performance gaps. However, these detailed scores are not directly used in scoring a chapter and a total business.
HOW TO USE THE CHECKLIST
The checklist is written and prepared as a practical assessment tool that is used for original gap analysis, for prioritization of activity and discrete improvement projects, and for ongoing review of progress of the journey toward Total Business Excellence.
Those conducting the assessment must be educated and knowledge- able about best practices in business in order to interpret the Definitions
xxii How to Use the Checklist
and Descriptions for the business being assessed. It is easy to award unreasonably high or low scores when not intimately familiar with excellence and best-practice standards generally held in the Subject and without close knowledge of the intent behind the Definition and its De- scriptions.
To get a balanced view of the complete process or the total business it is also important to understand the integrated nature of the checklist and the interrelationships between the priority and process Chapters.
The prioritization of improvement projects requires a practical and working knowledge of the Oliver Wight Business Maturity Map to properly identify the early activity to give quick gains while also laying the foundation for the total excellence journey.
For all of these reasons an independently facilitated approach to the initial diagnostic and ongoing assessment of your business is strongly recommended.
• To clearly identify and agree the scope of the Checklist that applies to your business
• To set a clear and independent benchmark that is consistent through the entire organization
• To set a manageable program of excellence activity through the whole business that allows the total business to advance, together with clear deliverables that benefit the business stakeholders
• To establish at the outset the work and deliverables that will qualify for the unique Oliver Wight Class A Milestone Award for each substantial business improvement achieved
• To create a meaningful plan that can be resourced and afforded for the entire journey to Oliver Wight Class A Business Excellence
SCORING AND RECOGNITION
The scoring system has been changed in this edition of the checklist to a more natural base of 5 and no fraction less than 0.5 is permissible at any scoring level. The scores are defined as:
• Score 0 (Not Doing): Practices are required for this business, but they do not exist at present.
• Score 1 (Poor): Practices exist, but they have not been developed to contribute to the business and its improvement.
How to Use the Checklist xxiii
• Score 2 (Fair): Practices have been developed in isolation from the rest of the business. They have delivered benefit but are not integrated or formalized into the business processes.
• Score 3 (Good): Practices are formalized and their checklist definitions are being satisfied; however, they have not yet been subjected to a systematic application of continuous improvement techniques.
• Score 4 (Very Good): Practices are fully integrated into the company’s business processes, and all checklist Definitions and De- scription characteristics are routinely met.
• Score 5 (Excellent): Practices are excellent and fully effective in the company. They successfully deliver its business goals and its defined Upper Quartile or standard performance measures.
An average score of 4.5 is required for all definitions in the agreed scope for any Class A recognition. However, before this can be awarded, the business performance measures for each chapter must also be fully satisfied and sustained for at least three consecutive months.
RECOGNITION
We expect that this new excellence standard will be more demanding upon companies and may require a longer period of improvement. Its pursuit will identify a business improvement program with substantial projects and milestones. Each project will give significant business benefits in a short time. The milestones also serve as major points for recognition. Recognition of agreed business deliverables along the journey will sustain the longer drive for business excellence. Achievement of these agreed milestones and their deliverables will be rewarded with an Oliver Wight Class A Milestone Award and will mark significant progress to Oliver Wight Class A Business Excellence. We expect that each project within your business improvement program will offer significant and sustainable benefits with rapid payback to the business. There is no longer any relevance to previous grades of ABCD, and they will no longer be recognized. Recognition can be only be given by the Oliver Wight organization and will be at three levels:
• Oliver Wight Class A Milestone Award: Derived from the original scope of the assessment and the prioritization of improvement projects in the business improvement program, each recognizable milestone will
xxiv How to Use the Checklist
be a significant step forward for the business and will demonstrate mea- surable benefits to the company and its stakeholders. It is unlikely that there would be more than eight such milestones in the total journey, and while some may be worked in parallel, it is likely that they will each be of six to nine months’ duration.
• Oliver Wight Business Unit Class A Accreditation: This recognizes the effort and achievement of a stand-alone business unit within a larger business that achieves the Class A requirements for all of its agreed scope.
• Oliver Wight Class A Business Excellence: This is the only full Class A certification awarded to a fully integrated business.
IMPLEMENTATION
Every company will develop its own approach to its business improvement program. The business need is the overriding priority for any excellence program, and this guarantees relevance to people at all levels of the business. This characterization will be displayed most in deter- mining the priorities of the milestone steps toward Business Excellence and the consequent resource allocations across the company. It is expected that a Class A implementation will include the following steps:
• Agreement of the scope of the intended Class A business improvement program
• Initial diagnostic against the full checklist scope to identify excellence gaps and to establish and quantify the competing opportunities for improvement
• Prioritization of activity to the company strategic goals and the agreement of a series of milestones and their identified projects (each milestone project will be significant and will be goal driven with clear performance targets and measures)
• Milestone project implementation using the education-led Oliver Wight Proven Path Process and full checklist assessment of the milestone activity to establish and manage the change program
• Milestone project recognition based on checklist assessment and performance for the scope of the project, including the priority chapters
• Full assessment against all nine chapters for Class A Business Ex- cellence
How to Use the Checklist xxv
• Ongoing annual assessment to identify new challenges and further relevant best practices as well as to assure that the Class A standard is being sustained
SUMMARY
An excellence program is vital for every company to beat its rivals and enable growth in its market place. Only the excellent companies will consistently win in business, and the required standard of excellence increases every day as customers expect more value and shareholders expect more return.
An excellence program will unite your people and provide a common set of goals that engages them all. It is exciting and energizing for them and for your customers and suppliers: It is guaranteed to achieve a pace of change that cannot be sustained by the top team alone.
The Class A standard has evolved over 30 years and is globally recognized as the statement of practical business excellence. It is not theory from academia nor propaganda models from government-backed bu- reaucracy. This Class A Checklist is the accumulated practice and experience of Oliver Wight Associates around the world, and it reflects the effort and achievement of thousands of client companies who have used our checklist standard to differentiate their business. Join with us in an exciting adventure to Oliver Wight Class A Business Excellence.
xxvi How to Use the Checklist
1 MANAGING THE STRATEGIC PLANNING PROCESS
PURPOSE
To establish and manage the process for setting vision, strategy, and direction in order to be an upper-quartile company. To ensure that this is reflected in all plans, projects, and actions throughout the company.
Chapter Content
1
UNDERSTANDING AND ANALYZING THE INTERNAL AND EXTERNAL ENVIRONMENT
1. A process exists to collect relevant information internally and externally to understand the company, its products and services, its market place, and the competition.
a. Company Capability
The company has a process to understand the capability of all its business processes to identify the strengths and weaknesses of its offer to the market place.
b. Industry Position
The company actively seeks information and in- put from inside and outside its sector to identify best practices and excellent performance in all its processes and at all company levels. It can show its industry position and measure that it performs at least as an Upper Quartile company in its sector.
c. Stakeholder Goals
The major stakeholders in the company are identified and their short-, medium-, and long- term goals are understood. The company has a balanced view of goals and targets.
d. Market Analysis
Sufficient investigation and analysis is carried out to understand the market in which the company operates, its competitor’s activity, and the value of its opportunities. This may include trends in geographic focus, consumer and customer demands, economic trends and national and international policies and regulations, etc.
2 The Oliver Wight Class A Checklist for Business Excellence
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e. Products and Services Portfolio
All parts of the products and services portfolio are examined to ensure the voices of the consumer and customer are understood and life- cycle trends are identified. The potential of competitor actions and technology discontinu- ities and breakthroughs in technology and the market place have been assessed.
2. This information is analyzed using appropriate tools to identify and prioritize opportunities and challenges for the success of the business.
a. Information Analysis
Information is analyzed to form a picture in words and figures of potential futures for the strategic plan horizon. Potential breakthrough areas for technical and nontechnical innovation are sought and identified for the company to differentiate from its competitors.
b. Analytical Tools
A comprehensive use of analytical tools is made to identify business trends and opportunities and to understand how the company responds to current and future consumer needs.
c. Capability Diagnostic
A diagnostic is prepared and agreed showing the capability of the company in all its processes and its adequacies or limitations for the future.
Managing the Strategic Planning Process 3
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d. Opportunities
The challenges and opportunities for the company from inside the company and from its external environment over the strategic plan horizon are understood and documented.
e. Prioritization
Opportunities to meet the business strategy are prioritized using established filter criteria, and the potential risk to the business from each opportunity is understood.
BUSINESS MISSION, VISION, AND VALUES
3. Mission and vision statements exist, representing the balanced views of the company (or business unit) and its stakeholders.
a. Top Down Team-Based
The company mission, vision, and strategy are for a suitable long-term horizon appropriate to the business. They are initiated and agreed by the chief executive officer, his company leadership team, and other functional heads and key play- ers, and they are shared and supported by the entire organization.
b. The Mission Statement
The mission statement is a clear and concise statement of the company’s strategic intent. It summarizes the main purpose of the business or business unit and the value that its products and services bring to customers, consumers, and society.
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c. The Vision Statement
The vision statement is inspiring and memorable and summarizes concisely what the company wants to become in its market place and community.
d. The Expanded Vision Statement
The expanded vision statement paints a picture in words and overview figures to show employees, customers, suppliers, and shareholders what the company plans to become in the medium and long term. It is sufficient for them to relate their actions and behaviors and their sense of values. It is long term enough to be independent of business cycles.
4. The company values shape the business strategies and supporting plans. They are captured in a values statement and are lived throughout the company.
a. Ownership
The company values are owned by the chief executive officer and the leadership team and are formally documented in a values statement that is discussed and agreed with all the company stakeholders.
b. The Values Statement
The values statement sets out the guiding principles and ethics by which the company will be known. It embodies how the company wishes to be perceived by all its stakeholders and is the prime driver for setting the culture of the business.
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c. Communication
The company values are formally presented to everyone in the company, and this process is used to create excitement and purpose and to stimu- late behavior change.
d. Living the Values
The company values are reviewed regularly and are used on an everyday basis to challenge the behaviors and culture of everyone in the company and to inspire all to improve continuously.
STRATEGIC PLANNING
5. A business strategic plan exists to support the mission and vision statement that is focused on strategic business objectives. It enables the alignment of all company processes and functional plans and the deployment of a hierarchy of measures.
a. Value Proposition
The strategic plan contains clear direction on the company value proposition (strategic values or value discipline), outlining how the company will differentiate as an upper-quartile performer in its chosen markets.
b. The Strategic Plan and Competing Priorities
The plan sets out for the medium and long term, the policies, goals, financial strategy, actions, and milestones for the company to attain its vision and firmly sets out the company’s Strategic Business Objectives. Its competing initiatives and ambi- tions are prioritized against a timeline. It is long term enough to be independent of business cycles.
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c. Strategic Business Objectives
The goals for the company area clearly stated in quantifiable Strategic Business Objectives, which are formally agreed and documented and are each owned by a member of the leadership team. The Strategic Business Objectives are the driving force for change throughout the organization. It drives the hierarchy of goals and objectives in all separate or integrated units of the business.
d. Validity and Affordability
The strategic plan has sufficient operational analysis and plans to ensure that it is valid and achievable and contains sufficient financial analysis to ensure that it is viable and can be funded.
e. Risk Analysis
The main risks are formally identified and documented, and actions to reduce risks and risk contingency plans are identified.
f. Organization Roles
The role of every part of the present and future organization and its planned achievement is defined. The prime measures in the hierarchy of measures are derived from the Strategic Business Objectives, and are identified, agreed, and owned by a member of the leadership team.
6. The assumptions generated through all parts of the strategic planning process are captured and formally documented. They are revalidated as additional information becomes available and are regularly reviewed and monitored.
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a. Documentation of Assumptions
The assumptions made in the construction and the agreement of the strategic plan are identified and are formally documented and communicated. Ownership of assumptions exists throughout the organization.
b. Validity
The assumptions are sufficiently tested to ensure that they are valid and are confirmed and applied throughout the business. Wherever possible, they are measured by their owners so that early warning of change is given.
c. Monitoring and Reporting
Key assumptions are monitored and reported through the formal company Integrated Busi- ness Management process on a planned and regular basis.
SUPPORTING PROCESS AND FUNCTION STRATEGIES
7. The business strategic plan is appropriately supported by strategies for the core processes of the business that collectively deliver the company goals.
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a. Market Strategy
There is a market analysis and planning process culminating in a market strategy to meet the growth and profitability aspirations of the business policies and plans covering the market sectors to be pursued. It also covers direction about the geography of the business and its planned channels and routes to market. The market strategy drives the company demand management processes and reviews.
b. Product and Services Strategy
There is clear analysis and direction on the products and services the company chooses to sell to meet its business aspirations, culminating in a product and services strategy. It includes direction for each product family or brand, its tar- geted consumers and customers, geographies, and the expected trends in product life cycles. It may include the company technology strategy and will drive the company product management processes and reviews and require a critical mass of identified core competencies.
c. Financial Strategy
There is a financial strategy for the business that sets out how the strategic plan will be viably funded and supported. It shows how the share- holder value and returns will be protected and grown. It defines the potential sources of funds and how those funds will be used. It will outline how the provision and use of financial information will be developed to promote and support advances in the business.
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d. Operations Strategy
There is an operations strategy that defines how the company processes will be developed to meet future service and costs targets and to introduce new products and services most effectively. It reflects the company’s competitive priorities. It covers processes from suppliers to consumers and from customer orders to invoicing, and includes a capital investment strategy that drives the company’s make/buy policies. The strategy defines the role and focus of each operating unit and drives the company supply management processes and reviews.
8. Detailed strategies for key supporting functions are also derived from the business strategic plan and should, at minimum, include human resources (HR), information technology (IT), and any other process enabler important to the business.
a. HR Strategy
The company is committed to excellence, and its values are demonstrated at all levels. The role of people as a major differentiator is understood, and a strategy and plan exists to focus the acqui- sition, development, recognition, and motiva- tion of the skills and competencies that are key to its future success. It includes practical succession planning to cover potential gaps in key positions and competencies.
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b. IT Strategy
The strategic plan is supported by an IT strategy that sets out the architecture and framework for systems and communication tools for the future. The strategy prioritizes planned investment in IT (as part of the company capital investment strategy) to support the business processes and its strategic initiatives and determines how it will be managed. The need to educate as well as train users and managers in the processes and required behaviors to secure the potential business gains from investments is recognized.
c. Data Strategy
A data strategy exists to define the static and dynamic information needs of the business and its partners and how they will be satisfied. Its implementation is owned by the leadership team. Data quality and integrity is understood as a foundation requirement and discipline for excellence and is measured throughout the organization.
STRATEGY DEPLOYMENT
9. The competing priorities of the business and its performance goals are resolved to determine the priority of strategic projects and their skill and capability requirements. Projects are justified by demonstrating a compelling need and case for change.
a. Performance and Capability Gap Analysis
The gap between current capability and future plans and needs is understood, and the benefits and time phasing of planned changes is quanti- fied.
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b. Business-Based Competitive Priorities
Proposed initiatives that compete with each other for attention are assessed using established and agreed criteria and are prioritized to the overall business needs during the lifetime of the strategic plan.
c. Project Approval
Each planned project is formally approved before work commences, and the need and case for change is proved with detailed business benefits and resource implications. Approved projects are held in a company-wide project master plan with agreed planned start and completion times, identified interdependencies, and ownership and sponsorship within the leadership team.
d. Skill Competence Analysis
The skill and competence base of the company is formally assessed against the strategic plan. Its strengths and weaknesses against timelines are understood, a gap analysis is conducted, and im- provements are planned. Gap-closure actions are assigned and drive the education, training, selection, and succession plans for the business.
10. Strategic plans are converted into goals at every level of the business with detailed and prioritized action and resource plans. They are cascaded and explained to all people, demonstrating the need and plan for change.
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a. Communication Process and Listening
The vision for the business is widely communicated in a succinct, consistent, and repeatable way with opportunity for builds and feedback, and strategic goals and plans are cascaded to working levels with ownership and sponsorship.
b. Deployment of Goals and Targets
The performance targets required to fulfill the business strategy and the goals outlined in approved and planned improvement projects are represented as goals and targets at all levels of the business. Accountabilities are assigned and are part of the appraisal process.
c. Detailed Project Plans
Approved projects have detailed plans for goal achievement with supporting resource and capability plans to develop and allocate the appropriate skills and competencies.
d. People Development Plans
Plans are prepared and actioned to prepare people for the change program and projects. People with talent, development potential, and leadership skills are identified, and personal development plans are instituted.
e. Measures and Reviews
Formal processes and tools are used to manage, review, and measure projects and goals at all levels. Management by exception is commonplace and proactive corrective action plans are communicated.
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BUSINESS PLANNING AND ANNUALIZED PLANS
11. The early years of the strategy are defined in the business plan and are the foundation of the company’s annualized plans. They are used throughout the company for individual and team goal setting.
a. Business Plan (Multiyear Plan)
The plan for implementation of the early years of the business strategy is contained in the top level business plan covering at least two years. The business plan is the foundation of all other plans and projects.
b. Annual Plan (or Budget)
The annual plan (or budget) shows in depth an integrated view of how the business strategy and plan will be met, with owned targets and goals to achieve that reach down to every individual or team.
c. Affordable
The resource requirement of the business plan and annual plan (or budget) is regularly reviewed, and their affordability is formally checked to ensure validity.
d. Integrated Business Management
The business plan and the annual plan (or budget) are the prime references for the monthly In- tegrated Business Management process.
12. The business plan is the main driver of the company annual plan (or budget), management control, and gap-closing activity.
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a. Alignment to Strategy
The annual plan (or budget) is driven top down from the business strategy and bottom up from the company Integrated Business Management processes and is in alignment with the business plan.
b. Budget Information
Information from the Integrated Business Man- agement process is directly used to compile the annual plan/budget.
c. Suite of Measures
A balanced suite of measures is in place at the top of the company, showing how well the inter- ests of all the stakeholders are managed. This suite is at the head of an integrated hierarchy of measures for the whole business that are used to monitor progress and drive action.
d. Assumption Management
The assumptions behind the strategic plan, the business plan, and the annual plan (or budget) is aligned, formally recognized, and documented. They are regularly monitored and reviewed, and plans and assumptions are updated as required. Assumptions are carried forward into the company Integrated Business Management process.
EVALUATION AND CONTROL
13. Formal and informal periodic reviews are held to confirm the alignment of forward strategies at all company levels and between processes and specialist functions.
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a. Diagnostic Review
On an annual basis, a formal diagnostic review of strategy deployment is undertaken. This will usually be a complete review of one sample strategic business objective to gauge the depth of its understanding throughout the business and the alignment of all business processes to achieve its goals.
b. Reflection
At least twice per year, the diagnostic is supported by an informal reflection of the strategic plan where a few key individuals come together to assess mutually the health and understanding of a particular Strategic Business Objective.
c. Resource Allocation
Strategic initiatives are included in the reporting and resource allocations in the Integrated Busi- ness Management process.
14. Results are regularly reviewed to ensure that the deployment and implementation of strategy delivers the company plans.
a. Project Organization
A project organization exists that embraces all strategic initiatives. It gives visibility of their progress and enables balanced cross-functional priorities and resource allocation.
b. Project Reviews
Project plans are regularly reviewed by line managers and sponsors from the leadership team, and decisions are made to keep them on course for success.
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c. Payback
Projected and actual business gains are measured and project based assumptions are reviewed to ensure that a project remains viable and worthy of completion.
d. Communication
Project launch, progress, and completion are widely communicated to recognize the efforts of those involved and to create an ongoing excitement and appetite for change throughout the workforce and its partner resources.
BUSINESS STRATEGY MANAGEMENT PROCESS
15. A dynamic process exists to ensure that the impact of decisions and events on the business strategy and plan are visible, understood, and agreed.
a. Integrated Business Management
The company is managed through an Integrated Business Management process, which reviews the activity and forward plans for all company processes and ensures that their integrated results meet the business plan.
b. Monthly Review Process
The process is based on demonstrated performance and manages the rolling period forward appropriate to the business through formal monthly reviews.
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c. Review of Strategic Initiatives
The company monthly review includes a review of progress and resource for strategic initiatives.
d. Short- and Long-Term Alignment
The review also ensures alignment between day- to-day events and decisions and the longer term plans for the business and is focused on identify- ing business gaps and actions for their closure.
RISK MANAGEMENT
16. Risk analysis of the strategic plans and actions is systematically and rigorously conducted and includes adequate follow up to mitigate identified vulnerabilities and establish contingency plans.
a. Risk Analysis
A standard method of risk analysis, which shows the comparative criticality of risks, has been adopted and is widely used at all levels of the business on an ongoing basis.
b. Risk Management
Plans and actions exist and are updated to eliminate risk or to reduce it to manageable levels.
c. Contingency Planning
Contingency plans exist at all levels of the business to minimize the impact of known risks and to shorten disruption and recovery time.
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PERFORMANCE MEASURES
17. A process exists to assess and drive company performance to its goals and targets and to its vision through a balanced approach as perceived by its various stakeholders.
a. Integrated Measures
A balanced suite of measures is in place at the top of the company showing how well the inter- ests of all the stakeholders are managed. This suite is the head of an integrated hierarchy of measures for the whole business that is used to monitor progress and drive action.
b. Visibility
The measures for a person or team are contained on one sheet and show trend as well as spot performance. Measures are clearly displayed for everyone to see and are designed to encourage improvement.
18. The measures are hierarchically structured and integrated so that the impact on the business of performance from any part of the organization is clearly visible and understood.
a. Team Targets
The measures at the head of the company are cascaded through all levels so that each person or team clearly understands their targets and performance expectations, including how this relates to overall company performance.
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b. Driving Improvement
Measures are used to drive performance improvement and to encourage continuous improvement of business relevant issues by individuals and teams.
c. Relevance
The measures are seen to be relevant and identify the performance and effectiveness of processes.
BEHAVIORAL CHARACTERISTICS
19. The strategic planning process is supported by a balance of cultural and behavioral development, which ensures positive team ownership of the entire plan with strong leadership and individual accountabilities.
a. Leadership and Excitement
The strategic planning process is led by the chief executive officer and his or her leadership team and rolled out to excite and engage all of its stakeholders.
b. Ownership
Performance, projects, and actions are owned at the appropriate level and are sponsored within the leadership team.
c. Communication
A formal communication process is used to pro- gressively cascade the strategies throughout the business and to engage the workforce. This is actively reinforced through everyday informal communication.
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PURPOSE
To develop people and their behaviors and the organizational culture and structure to deliver upper-quartile business plan performance through line management and team ownership.
Chapter Content
Integration with Strategy and All Business Processes Leadership People in Teams People Development Communication Organization Design Development and Planning Change Management and Learning Consistent Working Practices Management of Health, Safety Environment, and Community Rela-
tions Performance Measures
INTEGRATION WITH STRATEGY AND ALL BUSINESS PROCESSES
1. The values statement drives the development of the people strategy, which supports the business strategy.
a. Values Documented and Visible
The company’s values are both documented and visible for all employees. They are well publicized throughout the company. This is a proactive process, which seeks to refresh the presentation regularly. The aim is to ensure ongoing use of the Values and Guiding Principles.
b. Live Them
The top team seek to “live the values” by best role-model behavior. They seek and require similar demonstrations from their managers, supervisors, and team leaders and, thus, from all employees.
c. Culture Aligned to Values
It is recognized that the values are the glue for the organization; thus, the culture is continuously checked for alignment with the values. The employee attitude survey is an important part of this checking process.
d. Linkage to Other Strategies
The core basis of the value statements can be seen throughout the company’s strategies as a thread linking them together. Key owners of the various company strategies can articulate that linkage.
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e. Trust
Trust is highly valued throughout the organization. Key behaviors are widely recognized and are likely to include open door policy; “management by walking about” accepting of differ- ences, including suggestions for improvement, consistency of message, etc.
2. People strategies are well integrated with the company’s overall business strategies and demonstrate the commitment to aligning all employees with the company’s focus.
a. Create and Document
The people strategies for the organization are drawn up and owned by the whole of the top management team. They are documented and reviewed at least annually to ensure they remain relevant.
b. Relationship to Other Strategies
People strategies are well integrated with the company’s overall business strategies. They reflect the development of the organization, in particular showing the journey through transitions to greater maturity. This reflects increasing hor- izontal cross-functional activity linked with developing employee empowerment.
c. Top Management Owns
The top management team, both individually and collectively, demonstrate ongoing ownership of people strategies in their day-to-day actions. Each of them can articulate the key people strategies and their role in delivering them.
Managing and Leading People 23
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d. Awareness—Closed-Loop Feedback Test
The company seeks feedback from all employees on both the relevance and effectiveness of the people strategies and supporting actions. This is both an ongoing daily activity, as part of “good management,” as well as carried out formally and regularly, e.g. at face-to-face briefing meet- ings, at individual performance reviews, as part of the attitude survey, etc.
e. Resource to Support
Where people strategies require resources— people and/or budget—the company can show that such resources have been made available. Where resources cannot be allocated, initiatives are prioritized on a company-wide basis.
LEADERSHIP
3. The top management team articulate and demonstrate leadership, individually and collectively.
a. Understanding of Leadership versus Management
The Top Management team know and understand leadership qualities. They are able to articulate and demonstrate the difference and balance between management and leadership. They are able to build a desire for action in the rest of the organization.
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b. Situational Leadership and Maturity
The Top Management team are able to adapt their style to fit a broad range of business as well as individual and team situations. Their leadership style is appropriate to the current situation and consistently reflects the development of the organization as it transitions to greater maturity.
c. Demonstration—Role Model
The Top Management team, individually and collectively, are seen by the rest of the organization as role models for leadership. They demonstrate dissatisfaction with the status quo, constantly challenge and enable the organization to improve itself, and set and live up to high standards.
d. Consistent Behaviors and Accessibility
Individuals in the Top Management team dis- play collective behavioral responsibility. The behavior of the individuals is completely consistent with that of the team. All members of the Top Management team are accessible to the organization.
e. Leadership Capabilities in the Future
The Top Management team recognize that Leadership styles, skills, and abilities requirements will change over time. Processes and plans are in place to ensure that the right mix of skills and styles will be present in the team.
4. Leadership qualities are encouraged and rewarded at all levels throughout the organization.
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a. Identification of Leaders
Employees at all levels of the organization who demonstrate leadership qualities are identified and empowered to take on challenging assign- ments.
b. Education and Training
All employees with leadership potential are given the necessary education and training to learn the required skills and behaviors.
c. Encouragement, Reward, Recognition, Visibility
Demonstration of leadership is encouraged in employees at all levels. Employees who meet these challenges receive appropriate recognition and rewards. Successes are celebrated and made visible to the rest of the organization.
d. Leadership Opportunities and Resources
The organization provides many opportunities for employees to demonstrate leadership and to put learning into practice. Resources are provided in terms of budget or people.
e. Leadership Culture
The culture of the organization supports the development of potential leaders, in line with these and similar behaviors. Mentors are assigned. Mutual trust and accountability are visible. Mis- takes made while learning are tolerated. The rules are clear, and credit is shared.
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PEOPLE IN TEAMS
5. Teams are utilized as the primary means to direct, organize, and carry out the work.
a. Team Selection and Charter
Consistent criteria are used to select team members. Teams develop and work to an agreed Charter to satisfy the scope of their task.
b. Team Training and Team Building
Teamwork is reinforced throughout the company through the use of team-building activities. These activities are supported with training.
c. Appropriateness of Teams to Maturity Level
As the company develops from a functional organization to a more process-based structure, the organization of teams is developed to com- plement the changing requirements.
d. Team Performance, Results, and Recognition
The company rewards team performance, not just that of individuals. Team results are main- tained and displayed by the team.
e. Teams Aligned to Business Processes
Teams are aligned to business processes, thus business needs are recognized as more important than functional or personal needs. The teams pursue Continuous Improvement.
6. An empowerment culture exists to support and encourage employees to meet their responsibilities.
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a. Process-Based Teams
Teams are aligned to processes and understand their roles and responsibilities. When selected for teams, people understand the scope of their empowerment.
b. Resources
Management demonstrate the importance of teams through the allocation of resources to the team. Teams are educated and trained to assist skills development.
c. Management Role
Management understand that for empowerment to succeed, they must step back and let go. How- ever, they continue to provide direction and guidance.
d. Empowerment Increases with Maturity
As a company’s environment matures towards “self-managed teams,” a “boundaryless” mind- set develops.
e. People Accept Empowerment and Are Accountable for Their Actions
People openly and happily state their accountabilities and responsibilities. The environment is one of support and learning. Individuals recognize and embrace their team role.
PEOPLE DEVELOPMENT
7. The development of the people is viewed as strategically important and actively deployed.
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a. Budget Commitment, Opportunity, and Resources
The company has committed adequate resources, time, and finances to education and training.
b. Development Planning and Measurement of Success
Education and training are aligned with the strategic initiatives to assure the right education and training is done and that it is cost-effective. Education and training includes the principles of process and behavior change in an organization rather than just fact transfer tied to specific technology.
c. Education and Training Actively Deployed
The company education and training schedule is drawn up and published at least annually. The execution of the schedule is constantly tracked.
d. Performance Appraisal (Individual and Team)
A performance appraisal process has been established to provide employee feedback on key performance indicators that are directly linked to the company’s strategies, business plan, goals, and performance of business processes. Perfor- mance appraisals are linked to the successful application of skills and knowledge gained in the education and training sessions. An appraisal process is in place that has feedback capability from all levels.
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T
e. Opportunities for Personal Growth for All on an Equal Basis
The company provides the opportunity for advancement to all individuals within the organization on an equal basis with other applicants, both inside and outside the company. The company seeks applicants from a wide variety of backgrounds to ensure diversity of skills, per- spectives, and opinions throughout the leadership and technical ranks.
8. The company equips its people with the core competencies and skills required for the future.
a. Competencies and Skills Defined and Linked to Roles
Skill types that are critical to successfully imple- ment strategies have been identified in each business process. Competency profiles have been created for these job families. These competencies may vary but should include satisfying customer requirements, process knowledge, teamwork, innovation, mentoring, financial competency, and governance.
b. Succession Planning
Key positions have potential applicants within the organization that are positioned to fill open- ings as they occur. Career paths are clearly identified and communicated. Succession planning includes external recruitment.
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c. Mentoring and Coaching—Managing the Talent
Mentoring and coaching of team members are well established and valued processes. Mentors meet with assigned individuals on a regular basis to review progress and give guidance on the individual’s career plan.
d. Developing and Retaining the Right People
There is a clearly defined process for employee selection, induction, and placement. Employee development, career planning, and mentoring programs are in place and used to motivate and retain employees.
e. Self-development is Encouraged and Demonstrated
There is an ongoing process to assist individuals with managing their own careers within the company. Individual progress toward their career goals is reviewed at least annually as part of the company’s employee-development process.
COMMUNICATION
9. Good communication is promoted up and down the management structure and across all functions and processes.
a. Consistency
The importance of consistent, reliable, and relevant communications is recognized. Manage- ment initiate core messages and subsequently check for consistency throughout the organization.
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b. Two-Way
It is recognized that communication is a two-way process. Thus, mechanisms are in place to ensure that feedback is collected and acted upon, both up and down and across the organization.
c. Natural Communication
The organization encourages “natural communication” between people. People at every level automatically give and look to receive information to help them in their jobs.
d. Communication Etiquette
The organization has educated people at all levels in how to communicate effectively. These skills are two-way, and positive communication behaviors are required from all employees.
e. Meeting Skills and Behaviors
There is a focus on the importance of meeting skills and behaviors. Training has been given. Positive meeting skills and behaviors are consistently reinforced.
10. The company has an effective communication framework.
a. Definition
There is a comprehensive communications framework laying out the frequency, content, purpose, level of detail, venues, importance of listening skills, etc., for communication within the organization. Communication covers all levels of the organization from top to bottom, and it is regularly audited both for structure and effectiveness.
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b. Measure Effectiveness and Success
The communication processes are regularly measured for effectiveness and success; this is often a part of the Attitude Survey. Results are publicized and actions taken subsequently.
c. Closed-Loop Feedback (Perception is Reality)
The communication process actively seeks feedback from employees at all levels. There is recognition that the perception of the message by employees is their reality of what is being communicated.
d. Significance of Face-to-Face is Recognized
The key importance of face-to-face briefing is recognized and thus practiced throughout the organization at all levels.
e. Following Through with Actions Speed of Response
A communications process actively seeks up- ward feedback and then ensures that answers are provided. These answers are publicized widely to maximize the benefit. Speed of answer is recognized as important. Feedback is used to tailor future communications.
ORGANIZATION DESIGN DEVELOPMENT AND PLANNING
11. The planning and design of the organization, its role and its tasks reflect the business’ maturity and future plans.
0— N
a. Alignment with Strategy
The design of and planning for the organization is aligned with business strategy such that the organization is optimally structured and staffed. Or- ganization structure, roles, and tasks reflect the maturity of the business and its characteristics.
b. Simplification and Adaptability
The levels in the organization structure have been minimized. The organization is flexible and adaptable to changing business conditions.
c. Balancing Function against Process
Organizational planning and design balances function and process. Functional depth is provided while, at the same time, recognizing the process characteristics of work. Process excellence (speed, cost, quality) is fostered by the organization design. The organization is designed to meet internal and external customer needs.
d. Effective Planning
The company ensures that steps are taken to gain the understanding of the case for organizational change and expectations for roles, tasks, and performance objectives.
e. Compensation
The compensation plan reflects the business philosophy and fosters the achievement of business goals and objectives in a cost-effective way. Compensation structure attracts and retains competent employees. Team-based rewards are important.
0— N
T
12. Employee policies and procedures are consistent with the organizational design and plans. They reflect a thought-through approach for employees and are seen to be followed.
a. Performance Management
Performance goals, time frames, and methods of measurement are documented and well understood. Employee performance is managed in an open and constructive manner.
b. Human Resource Procedures
Human resource policies and procedures are reviewed at least annually. Policies and procedures are comprehensive, fully documented, and read- ily accessible, and employees understand them and know where to find them. Important policies and procedures are visibly posted in the workplace.
c. Staff Planning and Resource Planning
Staffing and resource planning, including the use of temporary workforce and outsourcing, also selection and redeployment, are consistent with human resource and business strategy.
d. Employee Relations and Recognition
Excellent employee relations are an objective of the company, and management actions reinforce this. The company places an emphasis on relationships and concern for others throughout the organization. Recognition of individuals and teams is widespread.
0— N
e. Employee Welfare and Quality of Life
The company concerns itself with quality of life and the welfare of employees, actively improving the human side of work. Employment continuity is an articulated, communicated company objective, and effective planning reduces the nega- tive effects of rapid change in demand and/or growth. The need for work/life balance is con- sidered in job design.
CHANGE MANAGEMENT AND LEARNING
13. The management of change is viewed as a distinct and ongoing requirement, and is a way of life for the entire organization. All changes are planned and managed effectively.
a. Education
The effective implementation of change is part of the education curriculum for all employees. Leadership and management embrace change and demonstrate acceptance. Dissatisfaction with the status quo is strongly encouraged.
b. Advocates and Change Agents
Advocates and change agents ensure that individuals, teams, and groups provide a welcom- ing atmosphere for new ideas, and support the development and implementation of change through their behaviors and actions.
0— N
c. Change is Increasingly Accepted as a Way of Life
Employees are motivated and rewarded for rec- ommending an

the oliver wight class a checklist for business excellence (the oliver wight companies)

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